Thousands of renters who work told to expect £3,800 extra in bank account

A funding boost for Universal Credit has given a boost for one group in particular, a new report has found. The Resolution Foundation found the main group to benefit from funding increases have been working-age households who rent.

But the report - In Credit - warned much of the increase in weekly payments has covered soaring rent bills. “A renting single parent who works 30 hours per week on the national living wage will be nearly £3,800 per year better off in 2024-25 than if they were on the old system,” the report found.

“Across the 2.7 million families in the private rental sector that are eligible for UC, the average gain compared to the old system is £1,200.” Alex Clegg, an economist at the Resolution Foundation, has spoken out over the findings this week.

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“Compared to the old system, universal credit offers greater support for renters and stronger incentives to enter work,” he said. “But its original design did not anticipate there being over 2 million claimants with poor health or disabilities.

“Alongside efforts from the NHS, education, and labour market policy to address the drivers of ill-health, UC will need to change to tackle Britain’s new challenge of long-term sickness.” The findings were published today (Monday April 15).

The report states: "Universal Credit, announced back in 2010 and introduced in 2013, will be fully rolled out by whoever wins the next election. The benefit has been on a rollercoaster over those years – with the IT underpinning it causing major teething problems, and later success in processing unprecedented numbers of claims during the pandemic.

"In the long years since Universal Credit was planned, both the system and Britain have changed a lot. So now is the time to step back and review the system the next government will inherit."